CHEGG: Schuepfer Incorporated bases its selling and administrative expense budget on budgeted unit sales. The sales budget shows 2,200 units are planned to be sold in March. The variable selling and administrative expense is $4.50 per unit. The budgeted fixed selling and administrative expense is $35,720 per month, which includes depreciation of $3,700 per month. The remainder of the fixed selling and administrative expense represents current cash flows. The cash disbursements for selling and administrative expenses on the March selling and administrative expense budget should be:

Total cash disbursement= $41,920

Explanation:

Giving the following information:

Number of units= 2,200

Variable selling and administrative expense= $4.50 per unit.

Budgeted fixed selling and administrative expense= $35,720 per month (depreciation of $3,700 per month)

We need to calculate the cash disbursements for selling and administrative.

Depreciation is not a cash expense.

Cash disbursement Selling and Administrative:

Total variable cost= 4.5*2,200= 9,900

Total fixed cost= (35,720 - 3,700)= 32,020

Total cash disbursement= $41,920

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